Service tax on rent on residential property

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Chaitanya Agrawal

misc

28 Points Posted on 12 July 2012

I recently read an article on Yahoo Finance on Negative List in which 17 services have been included in the negative list.

One of these items (Item no. 13) relates to Rent on Residential Property, wherein those staying in rented premises are exempt from Service Tax on the Rent paid.

However, as per the revised Negative List published, under Notification no. 25, this negative list has been expanded to 39 services.

Surprisingly, this list does not contain Rent on Residential Properties.

Correspondingly, what is the tax treatment?

Is Rent for Residential properties liable for Service Tax?

If so, why has the Government changed it's earlier position on Taxability of Residential Property?

Replies (3)

Ajit kumar Dubey

Taxation Manager

637 Points Posted on 12 July 2012

Negative list and mega notification are to be read separetly and not in isolation. Both negative list and the mega notification are effective w.e.f 01-07-2012. To conclude, if anything is exempt under negative list and the same has not been mentioned in the mega notification then it does not imply that teh said service is taxable, it continues to be exempted.

Sunil

Trader

2616 Points Posted on 12 July 2012

There is possibility that the item may have been removed from the negative list and therefore not included in the notification.

Ajit kumar Dubey

Taxation Manager

637 Points Posted on 13 July 2012

Both negative list and mega notification has to be read independently and not exclusively. There is no legality in "such possibility" as mentioned by Mr. Sunil.